Zovko: The EU and the US should find a common agreement on the Inflation Reduction Act
Brussels, 10 February 2023
EU leaders discussed today during the extraordinary European Council the EU’s response to the recently adopted Inflation Reduction Act (IRA) in the United States. The aforementioned act aims to curb inflation and invest in American energy production while promoting clean energy with generous subsidies worth over €339 billion. As these subsidies put European industries in an unequal investment position to their US counterparts, the European Commission recently presented the new Green Deal Industrial Plan.
Member of the European Parliament and the EPP rapporteur for EU – US relations Željana Zovko said the Commission’s proposal is a first step towards increased competitiveness of the European market. “The Green Deal Industrial Plan will invest in our European industries, make our manufacturing more competitive and prevent investors from leaving the EU. By redirecting existing funds and allocating unused budget lines, we can create new investments and jobs and build on our technological sovereignty to compete in today’s world”, Zovko stated. She added the EU should promote its biggest economic asset more, namely the Single Market, and ensure its capability to enable a smooth green and digital transition. According to Zovko, the additional pressure of high-energy prices on our industry is undermining European competitiveness.
At the same time, Zovko still encourages the US and the EU to come to an agreement on their transatlantic economic cooperation and avoid that their industries will drift apart. “I still hope that the EU and the US will find a common agreement on transatlantic investment in technology and green energy that will benefit both sides” she concluded.
The Green Deal Industrial Plan was presented by the Commission on February 1 as the EU’s response to the US’s Inflation Reduction Act. The Plan is based on four pillars: a predictable and simplified regulatory environment, speeding up access to finance, enhancing skills, and open trade for resilient supply chains. It aims to provide a more supportive environment for the scaling up of the EU’s manufacturing capacity for the net-zero technologies and products required to meet Europe’s ambitious climate targets.